What Promise Does AI Offer the Legal Sector?

January 12, 2018

Although law firms aren’t universally quick to adopt new technologies, most are at least aware that legal technology is changing their industry. At present, technologies such as Artificial Intelligence are seen as competitive differentiators with the potential to make some firms more efficient and deliver a competitive edge for the ones who adopt them. But in the long term, AI is likely to have much more significant effects on the legal sector.

AI can help law firms work faster and smarter, but it can also go far beyond that. Releasing lawyers from the monotonous but necessary tasks can unlock their potential to engage with clients.

It’s going to change job descriptions right across the industry, introducing a greater need for technical understanding. And whilst it may lead to job losses in the short-term, over the longer term the resource changes are likely to be more complex.

Advantages of AI

The main benefit of AI for law firms is the time saving it offers. When law firm revenues are derived from billable hours, this seems an odd thing to celebrate. But the work that AI could be taking care of is drudgery, tasks including legal discovery, case law research, and error checking.

The advent of AI could make law work considerably less onerous. It’s likely to change the role of the lawyer, particularly junior lawyers and paralegals to whom the heavy lifting often falls.

Writing in the 1930’s, the economist John Maynard Keynes predicted that the 21st century would see us all working a 15 hour week and that knowing what to do with all our leisure time would be a significant social challenge. That seems rather naïve now, so we’re reluctant to predict that lawyers are going to enjoy shorter working hours now that AI can save them time on document discovery.

The brutal truth is that many firms are probably going to cut headcounts the minute they realize that AI can save on time.

But labor changes in the industry are going to be more complex than just slashing jobs. Lawyers will still have a role to play interpreting the law, advising clients, and strategizing. In fact, they’ll need to find ways to add value to their firms because of a key question that legal AI poses – if legal AI is so good, why do we even need law firms?

Experienced lawyers will need to justify their role, not to mention their fee, by keeping clients informed and advised on key issues and handling both the human and business side of the law.

The role of the lawyer may evolve into one that’s much more like a consultant than a foot soldier, with an emphasis on adding value to their client businesses rather than slogging through discovery and case law.

It’s likely that a greater variety of roles and functions will be created within the legal industry, and the role of the “lawyer” will also change.

Not only will lawyers need to understand and use technology much more than they do at present, but they’ll also need to work alongside technological functions to a much greater extent in order to achieve what they need to.

The legal sector is also likely to face new resourcing challenges, as it competes with other sectors to recruit the tech talent it needs to stay ahead of these changes. Legal technology may be in a boom, with a fourfold investment increase since 2012 but this doesn’t always mean the skills are in place to deliver and implement this tech into legal businesses.

Resourcing challenges

AI’s impact on resourcing in the legal industry may be complex. It’s likely we’ll see junior lawyers and new grads struggling to find work, or finding that work is less well remunerated than in previous years.

The legal profession is going to rethink how it trains the lawyers of the future if law firms simply don’t need to take on so many junior lawyers. On the flip side, law grads with technical aptitude may find their careers move quickly.

Whilst it’s impossible to deny that some people will lose out on jobs and career opportunities as AI takes hold, the fact that AI can reduce legal costs could help the sector expand.

This may mean there’s more work available in general as it becomes more affordable for people to access legal services. But the industry is likely to see “shocks” as it adjusts to the introduction of AI – with job losses due to the tech not being immediately compensated for by an expanded industry.

Change is inevitable, particularly in the immediate future of the legal industry. Firms and individuals within the industry are going to have to move fast to keep up with these changes.

Acquiring tech knowledge and trying to keep ahead of the latest innovations is one way to try to survive what’s coming. But to survive, both firms and individuals are going to have to understand that the definition of a lawyer and a law firm is going to be significantly revised.